Bengzon V. Drilon Case Digest - Ermitano.docx

Procedure for the Passage of Bills (Secs. 26 and 27) Bengzon v. Drilon GR 103524, April 15, 1992 Ponente: Judge Gutierrez, Jr.

Petitioners: retired Justices of SC and CA - Cesar Bengzon, Querube Makalintal, Lino M. Patajo, Jose Leuterio, et. al, Respondents: Franklin Drilon as Exec. Secretary., Guillermo Carague as DBM Sec., and Rosalina Cajucom as National Treasurer, in their official capacities FACTS: This is an instant petition by retired Justices who are recipients of monthly pensions under Republic Act No. 910. It was enacted to allocate a monthly pension for retired justices who rendered at least 20 years of service and reached 70 or could not continue serving due to old age. Subsequently, RA 910 was amended by Republic Act No. 1797 (Section 3-A) which provides that “in case the salary of Justices of the Supreme Court or of the Court of Appeals is increased or decreased, such increased or decreased salary shall, for purposes of this Act, be deemed to be the salary or the retirement pension which a Justice who as of June 12, 1954 x x x.” Constitutional Commissions also had similar retirement benefits with automatic readjustment features under Republic Act 1568, as amended by RA 3595. Members of the Armed Forces also, under Presidential Decree 578 on November 12, 1974. On January 25, 1975 however, Marcos issued Presidential Decree 644 that repealed 3-A of RA 1797 and RA 3595. This means that the decree did not authorize anymore the automatic readjustment feature of retirement benefits of the Court and ConCom retirees. Later, President Marcos issued PD 1638 and 1909 for the automatic readjustment of pensions of enlisted men and members of the Armed Forces who have retired prior prior to September 10, 1979. In other words, the retired justices of SC and CA had lost the automatic readjustment feature of the retirement pensions. This perceived discrimination prompted the Congress to approve House Bill 16297 in 1990 to reenact the repealed provisions of Republic Act No. 1797 and 3595 as they were under the impression that the repealing Presidential Decree 644 became law after it was published in the Official Gazette on April 7, 1977. President Aquino, however, vetoed House Bill No. 16297 on July 11, 1990 on the ground that according to her "it would erode the very foundation of the Government's collective effort to adhere faithfully to and enforce strictly the policy on standardization of

compensation as articulated in Republic Act No. 6758 known as Compensation and Position Classification Act of 1989. It should be noted that there was a resolution by the SC on November 28, 1991, granting the petition of retired justices of the CA a readjustment of their salaries in accordance with RA 1797. The petitioners argued that PD 644 had no binding force or effect as there was no valid publication pursuant to Tanada v. Tuvera. This is treated as ADM. Matter 91-8-225-CA. So the Congress included certain appropriations for the retired justices of the SC and CA in the GA Bill for Fiscal Year 1992 (House Bill 34925) pursuant to the ruling of the Supreme Court in ADM. Matter 91-8-225-CA. On January 15, 1992, President Aquino exercised her veto powers again, this time vetoing many Sections of the 1992 GA Bill that are pertinent to special provisions for SC, CA, LC’s, and General Fund Adjustments as regards the readjustment of their retirement benefits. Aquino pointed out that such sections effectively nullified her veto of House Bill 16297, then reiterated the same reason of her veto of this House Bill in her veto of the GA Bill, adding “We should not permit the grant of distinct privileges to select group of officials whose retirement pensions under existing laws already enjoy preferential treatment over those of the vast majority of our civil servants." There are three contentions raised by petitioners here:  The subject veto is not an item veto  President Aquino’s veto violated the Doctrine of Separation of Powers  The veto deprives the retired Justices their right to the pension due to them  The veto impairs Fiscal Autonomy guaranteed by the Constitution ISSUE: W/N the President's veto of certain provisions (relating to the payment of the adjusted pensions of the retired Justices of the SC and CA) of the 1992 General Appropriations Bill (GAB) is UNCONSTITUTIONAL HELD: Petition GRANTED. Questioned veto is SET ASIDE as it is illegal and unconstitutional. RATIO DECIDENDI: A.) the subject veto is not an item veto The act of the Executive in vetoing the particular provisions is an exercise of a constitutionally vested power. But even as the Constitution grants the power, it also provides limitations to its exercise. The veto power is not absolute. The pertinent provision of the Constitution reads:

"The President shall have the power to veto any particular item or items in an appropriation, revenue or tariff bill but the veto shall not affect the item or items to which he does not object." (Section 27(2), Article VI, Constitution) In the exercise of the veto power, the SC says it is generally all or nothing. However, when it comes to appropriation, revenue or tariff bills, the Administration needs the money to run the machinery of government and it cannot veto the entire bill even if it may contain objectionable features. The President is, therefore, compelled to approve into law the entire bill, including its undesirable parts. It is for this reason that the Constitution has wisely provided the "item veto powers" to avoid inexpedient riders being attached to an indispensable appropriation or revenue measure. The power to disapprove any item or items in an appropriate bill does not grant the authority to veto a part of an item and to approve the remaining portion of the same item. (Gonzales v. Macaraig, Jr., 191 SCRA 452, 464 [1990]). What is an item? An item in a bill refers to the particulars, the details, the distinct and severable parts . . . of the bill (Bengzon, supra, at 916). It is an indivisible sum of money dedicated to a stated purpose. An examination of the entire sections and the underlined portions of the law which were vetoed will readily show that portions of the item have been chopped up into vetoed and unvetoed parts. Less than all of an item has been vetoed. Moreover, the vetoed portions are not items. They are provisions. More ironic is the fact that misinformation led the Executive to believe that the items in the 1992 Appropriations Act were being vetoed when, in fact, the veto struck something else. What were really vetoed are: (1) Republic Act No. 1797 enacted as early as June 21, 1957; and (2) The Resolution of the Supreme Court dated November 28, 1991 in Administrative Matter No. 91-8-225-CA. Republic Act No. 1797 provided for the adjustment of pensions of retired Justices which privilege was extended to retired members of Constitutional Commissions by Republic Act No. 3595. On January 25, 1975, President Marcos issued Presidential Decree No. 644 which repealed Republic Acts 1797 and 3595. Subsequently, automatic readjustment of pensions for retired Armed Forces officers and men was surreptitiously restored through Presidential Decree Nos. 1638 and 1909. It was the impression that Presidential Decree No. 644 had reduced the pensions of Justices and Constitutional Commissioners which led Congress to restore the repealed

provisions through House Bill No. 16297 in 1990. When her finance and budget advisers gave the wrong information that the questioned provisions is the 1992 General Appropriations Act were simply an attempt to overcome her earlier 1990 veto, she issued the veto now challenged in this petition. It turns out, however, that P. D. No. 644 never became valid law. If P. D. No. 644 was not law, it follows that Rep. Act No. 1797 was not repealed and continues to be effective up to the present. In the same way that it was enforced from 1957 to 1975, so should it be enforced. We agree that PD 644 never became a law because it was not validly published and that, consequently, it did not have the effect of repealing RA 1797. House Bill No. 16297 was therefore superfluous. B.) the veto violated the Doctrine of Separation of Powers The challenged veto has far-reaching implications which the Court can not countenance as they undermine the principle of separation of powers. The Executive has no authority to set aside and overrule a decision of the Supreme Court. No President may veto the provisions of a law enacted thirty-five (35) years before his or her term of office. Neither may the President set aside or reverse a final and executory judgment of this Court through the exercise of the veto power. C.) retired Justices and Judges were deprived of the right of pension due to them Petitioners have vested rights. It is of statutory origin. The provisions regarding retirement pensions of Justices arise from the package of protections given by the Constitution to guarantee and preserve the independence of the Judiciary. Any argument which seeks to remove special privileges given by law to former Justices of this Court on the ground that there should be no "grant of distinct privileges" or "preferential treatment" to retired Justices ignores these provisions of the Constitution and, in effect, asks that these Constitutional provisions on special protections for the Judiciary be repealed. The integrity of our entire constitutional system is premised to a large extent on the independence of the Judiciary. All these provisions are intended to preserve that independence. So are the laws on retirement benefits of Justices. As long as retirement laws remain in the statute book, there is an existing obligation on the part of the government to pay the adjusted pension rate pursuant to RA 1797 and AM-91-8-225-CA. D.) veto impairs Judiciary's Fiscal Autonomy guaranteed under Sec. 3, Article VIII and Doctrine of Separation of Powers In the case at bar, the veto of these specific provisions in the General Appropriations Act is tantamount to dictating to the Judiciary how its funds should be utilized, which is clearly repugnant to fiscal autonomy.

In the instant case, the vetoed provisions which relate to the use of savings for augmenting items for the payment of the pension differentials, among others, are clearly in consonance with the abovestated pronouncements of the Court. The veto impairs the power of the Chief Justice to augment other items in the Judiciary's appropriation, in contravention of the constitutional provision on "fiscal autonomy". What is fiscal autonomy? It contemplates a guarantee of full flexibility to allocate and utilize their resources with the wisdom and dispatch that their needs require. It recognizes the power and authority to levy, assess and collect fees, fix rates of compensation not exceeding the highest rates authorized by law for compensation and play plans of the government and allocate and disburse such sums as may be provided by law or prescribed by them in the course of the discharge of their functions. Fiscal autonomy means freedom from outside control. The veto is an anathema to fiscal autonomy and violative not only of the express mandate of the Constitution but especially as regards the Supreme Court, of the independence and separation of powers upon which the entire fabric of our constitutional system is based. WHEREFORE: The vetoed provisions of the 1992 Appropriations Act are declared valid and subsisting. The respondents are ordered to automatically and regularly release pursuant to the grant of fiscal autonomy the funds appropriated for the subject pensions as well as the other appropriations for the Judiciary. The resolution in Administrative Matter No. 918-225-CA dated November 28, 1991 is likewise ordered to be implemented and promulgated.